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RE/MAX Platinum

Expert Insights: What Is the Difference Between a Conforming and Non-Conforming Loan?





Conforming loans have terms and conditions that adhere to guidelines established by Fannie Mae and Freddie Mac, the two, big quasi-government corporations that purchase mortgage loans from lenders then package them into securities that are sold to investors.

Their guidelines are far-reaching and, as such, set borrower credit and income requirements, as well as the down payment and maximum loan amounts. Non-conforming loans are for buyers, such as the self-employed or people with poor credit histories, who do not qualify for mainstream loans.